Report · January 1, 2023

The Xsolla Report: The State of Play

Published by Xsolla

Summary

The global gaming market is undergoing a structural transformation driven by multiplatform integration and the rapid evolution of financial technologies, with total revenues projected to reach $211.2 billion by 2025. A significant catalyst for this growth is the rise of real-time payments, which are expected to account for 28% of global electronic transactions by 2027. This shift is particularly pronounced in emerging markets across the MEA and LATAM regions, where systems like India’s UPI and Brazil’s PIX are facilitating new revenue streams. To bypass traditional platform commissions and rising acquisition costs, developers are increasingly adopting mobile web shops and hybrid monetization models, including Buy Now, Pay Later services, which are forecasted to reach a $309 billion market value by 2030. Technological advancements in cloud gaming and artificial intelligence are further reshaping the industry landscape. Cloud gaming is anticipated to reach 2.5 billion users by 2024, though it continues to face technical challenges regarding latency and infrastructure. Simultaneously, generative AI is becoming a fundamental development pillar, with over 50% of top studios expected to utilize the technology by 2024 to improve efficiency by up to 30%. Within the next decade, AI is projected to support more than half of the entire game creation process, significantly reducing production timelines and costs. The industry is also pivoting toward a more interconnected ecosystem where cross-platform capabilities are a primary consumer demand, supported by 87% of multiplayer gamers. This integration, combined with advancements in virtual reality and blockchain, is fueling the expansion of the metaverse, which is forecasted to reach a $710 billion valuation by 2027. As privacy regulations and shifting ad efficiencies challenge traditional growth strategies, the sector is prioritizing flexible payment solutions and immersive, cross-play environments to maintain global momentum.

From the report

# CONTENTS - 6 FOREWORD - 8 EXECUTIVE SUMMARY - 9 IN THE NEWS - 11 Section 1 PAYMENTS - 15 Revolutionizing Gaming Transactions: The Global Surge Article 1 of Real-Time Payments - 25 Emerging Frontiers in Payments: Article 2 MEA and LATAM - 38 Guest Column - 41 New Ways to Pay: The Rise of Buy Article 3 Now, Pay Later Transactions

# CONTENTS Section 2 53 MOBILE GAMING 59 Article 1 Navigating Privacy Changes and International Regulations in Mobile Gaming 67 Guest Column 69 Section 3 PRODUCT 75 Cloud and Cross-Platform Gaming: The Impact of Hardware Article 1 Costs and 5G Accessibility 83 Transforming Gameplay and Development: Article 2 The Power of AI 93 The Metaverse: A Virtual Gateway Article 3 to the Future of Video Games 98 CONCLUSION 100 ABOUT XSOLLA

# Chris Hewish Xsolla As we present the Fall 2023 edition of "The Xsolla Report: The State of Play", a sense of enthusiasm and anticipation fills the air. The pace of change in our industry is swift, and your ongoing trust and engagement allow us to adapt, innovate, and lead. # A YEAR OF BOLD ACTIONS AND ACHIEVEMENTS This year has been nothing short of transformative for Xsolla. We have made significant strides in market reach and product innovation that have fundamentally altered how we operate and the value we offer to our partners. One of our proudest accomplishments is the robust performance of our Web Shop solutions. To put this into perspective, 40 of the top 100 mobile games have chosen to launch their Web Shops using Xsolla's comprehensive tools. But we didn't stop there—over the year, we assisted 151 games # FORE WORD in launching their Web Shops. These achievements are not isolated events but point toward a greater trend: the relentless march of the mobile gaming industry toward multiplatform operations. Our journey this year also took us to new territories in product innovation. We rolled out cutting-edge solutions like Headless Checkout and Xsolla Mall to meet the eclectic needs of our partners. These products not only enrich the portfolio we offer but also elevate the overall gaming experience for end-users. Strategic partnerships have always been the cornerstone of our success, and this year, we further solidified our alliances. Collaborative efforts have yielded products like Venmo, Klarna, M-Pesa, and digital wallets in emerging markets like Africa and the Middle East. In the corporate arena, our acquisitions of companies such as AcceleratXR, Lightstream, Rainmaker, and API. STREAM has positioned us to offer our partners even more comprehensive and diversified solutions. # CHARTING THE COURSE AHEAD The report that follows this introduction is a treasure trove of insights, trends, and analyses. It outlines the market dynamics in Payments, Mobile Gaming, and Product Development, offering you a clear view of the landscape we're operating in. As we look ahead, we focus on emerging markets and launch new products tailored specifically for the mobile gaming sector. Please delve into this report as it reflects our past accomplishments and charts the direction for an exciting and promising future. At Xsolla, we remain committed to continual growth, innovation, and, most importantly, to you — our partners and community. Sincerely, Chris Hewish Xsolla

# EXECUTI SUMMARY In a rapidly evolving landscape, the global gaming industry is poised for a resurgence after a brief setback in 2022. With projections indicating a market value of $212.4 billion by 2026, industry stakeholders are actively seeking insights into market dynamics, emerging trends, and player preferences to inform their strategic decisions. This report, compiled by the gaming experts of Xsolla aims to provide a comprehensive overview of the gaming ecosystem's current state and future directions. # THE FORECAST The global games market is expected to show sustained growth, generating revenues of $211.2 billion by 2025. Mobile games are set to dominate, with an estimated contribution of $103.1 billion driven solely by user spending. Meanwhile, cloud gaming is emerging as a significant disruptor, with an expected revenue of approximately $8.2 billion. Addition the VR gaming sector is projected to gain traction, yielding around $3.2 billion in revenue by 2024. These forecasts underscore the diversification and dynamism within the gaming market, presenting both opportunities and challenges for industry stakeholders. Xsolla has not only added 12 new solutions this year to help game developers achieve success, we’ve also played a pivotal role in launching Web Shops for 40 of the top 100 mobile games, reflecting our commitment to shaping the industry. In the inaugural edition of The Xsolla Report, our experts will share their insights on trends and changes in Fintech, mobile gaming, and product development, and with our two decades of video game industry knowledge and experience, we’ll highlight current and upcoming trends and analyze valuable data that can inspire and identify unique opportunities for you, our partners, and our community. Ready to navigate the chapters ahead, discover new information, and unlock insights about the future of the industry? Let The Xsolla Report be your guide. # IN THE NEWS Recent industry news GAMESTOP TO DROP CRYPTO WALLETS, CITES ‘REGULATORY UNCERTAINTY’ Bloomberg AFRICA'S GAMING MARKET PROJECTED TO SURPASS $1 BILLION BY 2024 Business Insider: Africa METAVERSE MARKET TO GROW BY USD 2,346.2 BILLION BY 2032 Global Newswire VISA’S NEW HEAD OF FINTECH TALKS PARTNERSHIPS, VENTURE AND CREATORS AS AN ADDRESSABLE MARKET Tech Crunch SUPREME COURT: APPLE DOESN'T NEED TO OPEN APP STORE PAYMENTS YET GamesIndustry.biz

# WHAT’S RELEVANT IN PAYMENTS AND FINTECH NOW? Despite recent expansion in console- and mobile-based subscription growth, the sector could grow much larger. For example, market leader Microsoft is committed to putting blockbuster content on Game Pass to attract new users; September’s release of Starfield will be the biggest litmus test for this strategy to date. The pending Activision Blizzard acquisition is also part of this growth. State institutions have started to pay more attention to the video game sector and its regulations, which includes the rise of scrutiny and limitations presenting challenges to those in the industry. The gaming market in China is a key example of this. Most major markets either already have real-time payment systems in place or are in development as local governments seek to unlock the economic benefits of more efficient payments, and the growth of real-time payments is accelerating across the globe. Real-time transaction volumes around the world are forecasted to reach 511.7B by 2027, according to ACI Worldwide, representing a compound annual growth rate of $21 . 3 \%$ . There’s an increase in the video game user market across new territories in developing countries (e.g. MEA and LATAM regions) and growing demand from foreign companies and emerging markets’ game developers to add local payment methods to their games and find solutions that can help them expand globally. The population of the MEA region is very young; almost a quarter of its population is 15–24. This is why the region has the attention of many in the game development industry since this age group is most passionate about gaming.

Real-time payments have emerged as a transformative force in global electronic payments, with nearly 28% of all electronic payments worldwide projected to be real-time by 2027 — a remarkable year-on-year growth rate of 63%. This shift is captivating users with its advanced user-friendly features. The growth of real-time payments can be attributed to many factors, with success stories in multiple geographies. One example is Brazil's introduction of PIX in 2020, a digital, low-cost, QR-code-based payment method. Since then, PIX has swiftly gained traction with 131 million users actively transacting through the platform. As a result, Brazil has emerged as the third fastest-growing real-time payments market, achieving a year-over-year growth rate of 228.9%. # 28% 7 b 0 2027 of all electronic payments worldwide projected to be real-time by 2027 # GLOBAL REAL-TIME PAYMENT TRANSACTIONS # 1 I 2022 YoY growth of 63.2% # GLOBAL FORECAST 2027 # 11. 7 2027 CAGR of 21.3% between 2022 and 2027

Pages: 51
Words: 8,179
Format: PDF
Type: Report

Topics

Collections

Market (Overall)

View this document on Game Industry Library.

Related Documents

Report

The Xsolla Report: State of Play (Autumn 2024 Edition)

Mobile gaming is now the dominant segment of the global video‑games market, generating $98.7 billion in 2024, of which roughly two‑thirds ($65 billion) originates from Asian economies. The rapid expansion of smartphones, high‑speed connectivity, and localized content have driven this growth, positioning mobile titles as the primary source of interactive entertainment worldwide. A pivotal shift is the emergence of direct‑to‑consumer (D2C) web shops as essential revenue channels for mobile developers. Awareness of these storefronts is extremely high, with 81 % of players recognizing them and 77 % having completed at least one purchase. Although only a small “whale” cohort—between two and six percent of the player base—accounts for 95 % of in‑app spending, this segment also delivers superior retention and lifetime value, underscoring its strategic importance for monetisation strategies. Empirical case studies illustrate the financial upside of integrating D2C web shops. Titles such as Tilting Point’s *Warhammer: Chaos and Conquest* and *Star Trek Timelines* achieved revenue lifts of up to 50 % after adding web‑shop functionality, leveraging exclusive content, personalised offers and frictionless payment methods to stimulate repeat purchases. These findings suggest that developers who adopt low‑friction, web‑based commerce can capture a larger share of the whale segment while also expanding overall player spend. Overall, the data indicate that the mobile gaming ecosystem is maturing into a highly concentrated market where a minority of high‑spending users drive the majority of revenue. Strategic investment in D2C web‑shop infrastructure and targeted offers for whales presents a clear pathway for developers to enhance monetisation, improve player retention, and sustain growth in an increasingly competitive global landscape.

market-analysis player-behavior mobile+1

XsollaJan 2024

Report

Xsolla Report: State of Play – Winter 2024 Edition

The global gaming industry is currently navigating a period of stabilization following a massive 26% growth surge between 2019 and 2021. While the rapid pandemic-era expansion has moderated, the sector reached $106.8 billion in 2023 and is on a trajectory to hit $205.7 billion by 2026. This growth is underpinned by a global player base expanding to 3.79 billion people, with mobile gaming remaining the dominant force, accounting for nearly half of all consumer spending. Despite a downward revision in year-over-year growth forecasts to 0.6%, mobile spending is expected to reach $111.4 billion in 2024, led by strong performance in the United States and Japan. The industry is undergoing a significant structural transformation driven by technological shifts and regulatory changes. The transition toward digital-only monetization, cloud-based services, and the metaverse—projected to reach $996 billion by 2030—reflects a broader convergence with the entertainment landscape. Furthermore, the implementation of the Digital Markets Act is opening doors for alternative billing systems and direct-to-consumer web stores. These shifts occur alongside a demographic evolution where women now represent nearly 50% of the player base, though they remain underrepresented in executive and professional roles. Financial dynamics within the sector show a complex landscape of consolidation and rising costs. While AAA development budgets have tripled over the last five years, the investment market has faced volatility, characterized by a cooling M&A environment and significant layoffs. Despite a drop in deal volume, strategic investment value surged by 577% in mid-2023, reaching $7 billion in a single quarter. To counter high user acquisition costs and stricter privacy regulations, developers are increasingly adopting generative AI for efficiency and pivoting toward community-focused organic reach, early access models, and influencer partnerships to ensure long-term sustainability.

market-analysis diversity-inclusion player-demographics+1

XsollaJan 2024

Report

The Xsolla Report: State of Play Q2 2025

Mobile gaming has become the dominant engine of the global video‑game market, now accounting for more than half of total industry revenue and projected to exceed $126 billion in 2025, with an overall forecast of $150 billion for the segment. The surge is driven by unprecedented user engagement—4.2 trillion hours of app usage in 2024—and a rapid shift toward direct‑to‑consumer (D2C) commerce following the April 2025 court order in Epic Games v. Apple, which obliges iOS platforms to permit external web‑shops and allows developers to retain up to 95 % of transaction value. Early adopters report revenue recoveries measured in millions and a 60 % increase in user engagement for high‑volume titles. Regulatory reforms across the EU, United States, Japan, South Korea and China are dismantling traditional app‑store monopolies, mandating alternative storefronts, transparent odds disclosure and the elimination of hidden fees. Despite tighter oversight, the mobile ecosystem remains robust, with the United States generating roughly $52 billion in in‑app‑purchase sales, while emerging markets in Latin America, Southeast Asia and Saudi Arabia expand the geographic footprint. Hybrid monetisation—combining in‑app purchases, advertising and subscriptions—is employed by 72 % of developers and now represents about three‑quarters of mobile revenue; live‑ops‑driven hybrid‑casual titles are delivering a 30 % year‑over

market-analysis monetization market-forecast+2

XsollaJun 2025

Report

State of Play: Spring Edition

Mobile gaming has solidified its position as the industry’s primary driver, currently engaging 1.9 billion players and tracking toward $118 billion in annual revenue by 2027. This growth is occurring alongside a fundamental restructuring of digital commerce. Regulatory shifts, such as the European Union’s Digital Markets Act and recent judicial rulings, are dismantling the traditional walled gardens of major app stores. By forcing the adoption of alternative billing systems and out-of-app commerce, these changes allow developers to bypass standard commission fees and engage in direct-to-consumer marketing, fundamentally altering the economics of mobile distribution. The industry is simultaneously transitioning toward a cross-platform ecosystem where seamless play and unified payment systems across mobile, PC, and console are becoming standard. Consumer behavior supports this shift, as 87% of multiplayer gamers now engage in cross-platform play. Younger demographics, specifically Gen Alpha and Gen Z, exhibit a 52% payer conversion rate, significantly outperforming older cohorts. To capture this value, developers are increasingly forming strategic alliances with telecommunications providers to integrate 5G infrastructure and mobile wallets, ensuring frictionless transactions in a "cross-pay" environment. Despite a significant cooling in investment during 2023—characterized by a 75% drop in Web3 funding and a 43% decline in merger and acquisition activity—the sector is recalibrating toward a sustainable "new normal." The workforce is becoming more formalized, with nearly three-quarters of designers holding university degrees. Market analysts anticipate a recovery throughout 2024, marked by a 20% increase in deal flow and the entry of major media entities like Netflix and Disney. This stabilization is supported by a shift in venture capital toward alternative models that prioritize marketing and operational support over traditional equity-only investments.

market-analysis investment mobile+1

XsollaMar 2024